1. Field of the Invention
The invention relates generally to systems for trading or simulation of trading in financial instruments, such as securities and their derivatives.
2. Background Technology
The trading of financial instruments such as stocks, options, commodities futures, currency futures and the like is engaged in daily around the world on a vast scale.
The majority of this trading is done by professional money management organizations, such as brokerages and investment companies, in which professional money managers analyze and make investments for the portfolios of client persons and organizations. A smaller but growing segment of the trading population consists of on-line traders who engage in trading directly for their own portfolios.
A complex infrastructure exists to support the execution of trades on behalf of traders and related parties such as market makers and clearinghouses. However, tools for analyzing the effects of a transaction on a trader's portfolios are not as sophisticated. Currently the systems that execute transactions are not linked to systems that track portfolio status and performance, and so a trader desiring such information needs to perform a separate analysis using a spreadsheet. This requires a great deal of data entry and formula development that is time consuming and prone to errors, and is therefore not feasible to perform on a large scale or in a comprehensive manner for all available trading possibilities. Consequently, because traders must use one system to determine the effects of a hypothetical trade on the portfolio for which the trade is being made, and then use another system to actually execute the trade, they are unable to assess the effects of available trades on their portfolios in a convenient and meaningful way.